cash out refi or sell
Hello I really need help in deciding which of these 2 options if any I should choose. we purchased a 3BR 3BATH townhouse in Martinsburg WV back in 2018 for 175k that my wife kids and I lived in until 2021. shortly after that we relocated to Jacksonville Fl. bought a 2nd primary single family, created an LLC, placed the WV property under it at a 6.6% commercial interest rate which put our loan balance at 180k and have since being doing long term rentals with a tenant property managing the WV townhouse myself. obviously the townhouse has appreciated nicely and analysis puts its selling price point at about 300k. I would now like to continue my journey in purchasing more rentals properties preferably a condo or 2 under the existing LLC but I'm not sure how to proceed
should I
1) do a cash out refi on the WV townhouse then use the funds as a down payment on 2 new mortgagees, which I'm not even sure if that's possible?
or
2) sell the WV townhouse then use the funds for 2 down payments on new mortgages?
I really do not want to sell the Townhouse but I don't know how to continue to build my portfolio without doing so. I don't have 20k just laying around for a Down payment on a new commercial loan. there has to be some kind of way to compound in order to make this happen. I feel stuck please assist
Most Popular Reply
If you had kept it under your name, you could sell it (depending on when you last lived there) without incurring capital gains tax. Since that is no longer on the table, I think you should analyze if it will still generate enough cash flow if you do a 2nd mortgage to get the cash out.